KINGSOFT CORP(3888.HK):ACG GAME SNOWBREAK IS REGAINING STRONG MOMENTUM
KINGSOFT CORP(3888.HK):ACG GAME SNOWBREAK IS REGAINING STRONG MOMENTUM
Kingsoft will report 1Q24 results on 22 May and our preview of the results and outlook is becoming more positive. Since Mar-Apr, its ACG game Snowbreak: Containment Zone has been regaining user growth momentum and even ranked 2nd in free game download in China iOS app store. Regarding office software, we expect the kick-off of WPS AI monetisation should also bring decent paying user and APRRU growth from 2H24 onwards. We increase 2024 online game revenue estimate by 7% and group net profit by 24% to primarily factor in a more bullish online game business outlook. We raise our TP from HK$37.5 to HK$38.5 based on SOTP. Kingsoft is now our software top BUY.
金山軟件將於5月22日公佈24年第一季度業績，我們對業績和前景的預見變得更加樂觀。自3月至4月以來，其ACG遊戲Snowbreak：Containment Zone一直在恢復用戶增長勢頭，甚至在中國iOS應用商店的免費遊戲下載量中排名第二。關於辦公軟件，我們預計，從24下半年起，WPS AI貨幣化的啓動也將帶來可觀的付費用戶和APRRU的增長。我們將2024年的在線遊戲收入預期提高了7％，將集團淨利潤提高了24％，這主要是網絡遊戲業務前景更加樂觀的原因。根據SOTP，我們將目標價從37.5港元提高到38.5港元。金山軟件現在是我們的首選軟件。
Key Factors for Rating
評級的關鍵因素
Strong online game 2024 outlook: Snowbreak: Containment Zone (塵白禁 區, CBJQ) is an ACG third person shooting game published by Kingsoft Seasun studio with competing games like Goddess of Victory: Nikke. We raised Kingsoft 2024 online game revenue estimate by 7% and GPM by 2ppts, mainly thanks to the strong performance of Snowbreak from Mar-April 2024. According to Diandian, Snowbreak generated US$1.63m China iOS revenue over 17 Apr - 16 May. Based on assumed revenue mix of 1) 1:2:2 for Apple iOS, Android and PC and 2) 6:4 for China and overseas, we estimate the past 30 days' global cross- platform revenue from Snowbreak may reach over US$13.6m (RMB98m). Given the game is still in an uptrend, especially among male gamers, we become bullish on Kingsoft's net profit from 2Q24 onwards.
強勁的2024年在線遊戲展望：Snowbreak：Containment Zone（containment Zone，CBJQ）是一款由金山Seasun工作室發行的ACG第三人稱射擊遊戲，其競爭遊戲包括《勝利女神：NIKKE》。我們將金山2024年在線遊戲收入預期提高了7％，將GPM提高了2個百分點，這主要歸功於Snowbreak在2024年3月至4月期間的強勁表現。根據Dianian的說法，《Snowbreak》在4月17日至5月16日期間在中國創造了163萬美元的iOS收入。根據蘋果iOS、安卓和個人電腦的1) 1:2:2 以及中國和海外的2) 6:4 的假設收入組合，我們估計，過去30天來自Snowbreak的全球跨平台收入可能超過1360萬美元（人民幣9800萬元）。鑑於該遊戲仍處於上升趨勢，尤其是在男性遊戲玩家中，我們開始看好金山自24季度以來的淨利潤。
Office software remains key long-term catalyst: per Kingsoft Office's released 1Q24 results, Office software sales increased 17% YoY to RMB1,225m, driven by ToC (+25% YoY) and ToB subscription (+14% YoY), with increasing ARPU. MAU was stable at 602m. In 1Q24, Kingsoft started to monetise WPS AI (RMB25 per user/month or RMB35 per user/month for all-in-one package including WPS super member and WPS AI). While we find WPS AI's capability does not differentiate much from other AI products like Microsoft 365 Copilot in terms of word doc and slide generation, we believe the huge domestic installed base of WPS offers a unique competitive edge for AI user acquisition, which will accelerate its paying user and ARPPU growth.
辦公軟件仍然是關鍵的長期催化劑：根據金山辦公發佈的24年第一季度業績，辦公軟件銷售額同比增長17％，至12.25億元人民幣，這得益於ToC（同比增長25％）和ToB訂閱量（同比增長14％），ARPU的增加。MAU 穩定在 6.02 億。在24年第一季度，金山開始通過WPS AI獲利（包括WPS超級會員和WPS AI在內的一體化套餐，每位用戶/月 RMB25 或每位用戶/月 RMB35）。儘管我們發現WPS AI的能力在Word文檔和幻燈片生成方面與微軟365 Copilot等其他人工智能產品沒有太大區別，但我們認爲WPS龐大的國內用戶群爲人工智能用戶獲取提供了獨特的競爭優勢，這將加速其付費用戶和ARPPU的增長。
Key Risks for Rating
評級的主要風險
1) High reliance on JX game IP; 2) Xinchuang demand may fluctuate in short term; 3) online collaboration software competition; 4) AI product development.
1) 高度依賴劍俠遊戲IP；2) 信創需求可能在短期內波動；3) 線上協作軟件競爭；4) 人工智能產品開發。
Valuation
估價
We apply 16x P/S on 2024 Office Software, 1.2x P/S on 2024 Cloud, 9x P/E on Online Game (was 8x) and a 35% holding company discount. Maintain BUY with new target price of HK$38.5 (was HK$37.5).
我們對2024辦公軟件採用16倍市銷率，2024雲端應用1.2倍市盈率，在線遊戲市盈率爲9倍（原爲8倍），控股公司折扣爲35％。維持買入，新目標價爲38.5港元（原價37.5港元）。
譯文內容由第三人軟體翻譯。